Almost every measure of the capabilities of digital electronic devices is linked to Moore's law: processing speed, memory capacity, even the number and size of pixels in digital cameras.[6] All of these are improving at (roughly) exponential rates as well.[7]
This has dramatically increased the usefulness of digital electronics in nearly every segment of the world economy.[8] Moore's law describes this driving force of technological and social change in the late 20th and early 21st centuries.

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Predictions of similar increases in computer power had existed years before Moore published his observation. Alan Turing in a 1950 paper had predicted that by the turn of the century, computers would have a billion words of memory.[9] Moore may have heard Douglas Engelbart, a co-inventor of today's mechanical computer mouse, discuss the projected downscaling of integrated circuit size in a 1960 lecture.[10]

The complexity for minimum component costs has increased at a rate of roughly a factor of two per year ... Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000. I believe that such a large circuit can be built on a single wafer.[2]

Moore slightly altered the formulation of the law over time, bolstering the perceived accuracy of Moore's Law in retrospect.[12] Most notably, 1975, Moore altered his projection to a doubling every two years. Despite popular misconception, he is adamant that he did not predict a doubling "every 18 months". However, an Intel colleague had factored in the increasing performance of transistors to conclude that integrated circuits would double in performance every 18 months.[13]

In April 2005, Intel offered $10,000 to purchase a copy of the original Electronics Magazine.[14] David Clark, an engineer living in the UK, was the first to find a copy and offer it to Intel.[15]

Several measures of digital technology are improving at exponential rates related to Moore's law, including the size, cost, density and speed of components. Moore himself wrote only about the density of components (or transistors) at minimum cost. He noted:

Moore's law has been the name given to everything that changes exponentially. I say, if Gore invented the Internet,[16] I invented the exponential.[17]

Transistors per integrated circuit. The most popular formulation is of the doubling of the number of transistors on integrated circuits every two years. At the end of the 1970s, Moore's law became known as the limit for the number of transistors on the most complex chips. Recent trends show that this rate has been maintained into 2007.

Density at minimum cost per transistor. This is the formulation given in Moore's 1965 paper.[2] It is not about just the density of transistors that can be achieved, but about the density of transistors at which the cost per transistor is the lowest.[18] As more transistors are put on a chip, the cost to make each transistor decreases, but the chance that the chip will not work due to a defect increases. In 1965, Moore examined the density of transistors at which cost is minimized, and observed that, as transistors were made smaller through advances in photolithography, this number would increase at "a rate of roughly a factor of two per year".[2]

Cost per transistor. As the size of transistors has decreased, the cost per transistor has decreased as well. However, the manufacturing cost per unit area has only increased over time, since materials and energy expenditures per unit area have only increased with each successive technology node.

Computing performance per unit cost. Also, as the size of transistors shrinks, the speed at which they operate increases. It is also common to cite Moore's law to refer to the rapidly continuing advance in computing performance per unit cost, because increase in transistor count is also a rough measure of computer processing performance. On this basis, the performance of computers per unit cost—or more colloquially, "bang per buck"—doubles every 24 months.[citation needed]

Power consumption. the power consumption of compute nodes doubles every 18 months.[19]

RAM storage capacity. Another version states that RAM storage capacity increases at the same rate as processing power.

Network capacity According to Gerry/Gerald Butters,[21][22] the former head of Lucent's Optical Networking Group at Bell Labs, there is another version, called Butter's Law of Photonics,[23] a formulation which deliberately parallels Moore's law. Butter's law[24] says that the amount of data coming out of an optical fiber is doubling every nine months. Thus, the cost of transmitting a bit over an optical network decreases by half every nine months. The availability of wavelength-division multiplexing (sometimes called "WDM") increased the capacity that could be placed on a single fiber by as much as a factor of 100. Optical networking and DWDM is rapidly bringing down the cost of networking, and further progress seems assured. As a result, the wholesale price of data traffic collapsed in the dot-com bubble. Nielsen's Law says that the bandwidth available to users increases by 50% annually.[25]

Pixels per dollar. Similarly, Barry Hendy of Kodak Australia has plotted the "pixels per dollar" as a basic measure of value for a digital camera, demonstrating the historical linearity (on a log scale) of this market and the opportunity to predict the future trend of digital camera price and resolution.

Moore's law as a target for industry and a self-fulfilling prophecyEdit

Although Moore's law was initially made in the form of an observation and forecast, the more widely it became accepted, the more it served as a goal for an entire industry. This drove both marketing and engineering departments of semiconductor manufacturers to focus enormous energy aiming for the specified increase in processing power that it was presumed one or more of their competitors would soon actually attain. In this regard, it can be viewed as a self-fulfilling prophecy.[26][27]

As the cost of computer power to the consumer falls, the cost for producers to fulfill Moore's law follows an opposite trend: R&D, manufacturing, and test costs have increased steadily with each new generation of chips. Rising manufacturing costs are an important consideration for the sustaining of Moore's law.[28]
This had led to the formulation of "Moore's second law," which is that the capital cost of a semiconductor fab also increases exponentially over time.[29][30]

Materials required for advancing technology (e.g., photoresists and other polymers and industrial chemicals) are derived from natural resources such as petroleum and so are affected by the cost and supply of these resources. Nevertheless, photoresist costs are coming down through more efficient delivery, though shortage risks remain.[31]

The cost to tape-out a chip at 90 nm is at least US$1,000,000, and exceeds US$3,000,000 for 65 nm.[32]

Computer industry technology "road maps' predict (as of 2001) that Moore's law will continue for several chip generations. Depending on the doubling time used in the calculations, this could mean up to a hundredfold increase in transistor count per chip within a decade. The semiconductor industry technology roadmap uses a three-year doubling time for microprocessors, leading to a tenfold increase in the next decade.[33] Intel was reported in 2005 as stating that the downsizing of silicon chips with good economics can continue during the next decade[34]
and in 2008 as predicting the trend through 2029.[35]

Some of the new directions in research that may allow Moore's law to continue are:

Researchers from IBM and Georgia Tech created a new speed record when they ran a silicon/germaniumheliumsupercooled transistor at 500 gigahertz (GHz).[36] The transistor operated above 500 GHz at 4.5 K (−451°F/−268.65°C)[37] and simulations showed that it could likely run at 1 THz (1,000 GHz). This trial only tested a single transistor, however.

In early 2006, IBM researchers announced that they had developed a technique to print circuitry only 29.9 nm wide using deep-ultraviolet (DUV, 193-nanometer) optical lithography. IBM claims that this technique may allow chipmakers to use current methods for seven years while continuing to achieve results forecast by Moore's law. New methods that can achieve smaller circuits are expected to be substantially more expensive.

On 27 January 2007, Intel demonstrated a working 45nm chip codenamed "Penryn", intending mass production to begin in late 2007.[38] A decade before then, chips were built using a 350 nm process.

In April 2008, researchers at HP Labs announced the creation of a working "memristor": a fourth basic passive circuit element whose existence had previously only been theorized. The memristor's unique properties allow for the creation of smaller and better-performing electronic devices.[39] This memristor bears some resemblance to resistive memory (CBRAM or RRAM) developed independently and recently by other groups for non-volatile memory applications.

On 13 April 2005, Gordon Moore stated in an interview that the law cannot be sustained indefinitely: "It can't continue forever. The nature of exponentials is that you push them out and eventually disaster happens" and noted that transistors would eventually reach the limits of miniaturization at atomic levels:

In terms of size [of transistor] you can see that we're approaching the size of atoms which is a fundamental barrier, but it'll be two or three generations before we get that far—but that's as far out as we've ever been able to see. We have another 10 to 20 years before we reach a fundamental limit. By then they'll be able to make bigger chips and have transistor budgets in the billions.[40]

In January 1995, the DigitalAlpha 21164 microprocessor had 9.3 million transistors. This 64-bit processor was a technological spearhead at the time, even if the circuit’s market share remained average. Six years later, a state of the art microprocessor would have more than 40 million transistors. In 2015, it is believed that these processors should contain more than 15 billion transistors. Things are becoming smaller each year. If this continues, in theory, in less than 10 years computers will be created where each molecule will have its own place, i.e. we will have completely entered the era of molecular scale production.[41]

Then again, the law has often met obstacles that appeared insurmountable, before long surmounting them. In that sense, Moore says he now sees his law as more beautiful than he had realized: "Moore's law is a violation of Murphy's law. Everything gets better and better."[42]

Moore's law of Integrated Circuits was not the first, but the fifth paradigm to forecast accelerating price-performance ratios. Computing devices have been consistently multiplying in power (per unit of time) from the mechanical calculating devices used in the 1890 U.S. Census, to [Newman's] relay-based "[Heath] Robinson" machine that cracked the Nazi [Lorenz cipher], to the CBSvacuum tube computer that predicted the election of Eisenhower, to the transistor-based machines used in the first space launches, to the integrated-circuit-based personal computer.[43]

Thus, Kurzweil conjectures that it is likely that some new type of technology (possibly optical or quantum computers) will replace current integrated-circuit technology, and that Moore's Law will hold true long after 2020. He believes that the exponential growth of Moore's law will continue beyond the use of integrated circuits into technologies that will lead to the technological singularity. The Law of Accelerating Returns described by Ray Kurzweil has in many ways altered the public's perception of Moore's Law. It is a common (but mistaken) belief that Moore's Law makes predictions regarding all forms of technology, when it actually only concerns semiconductorcircuits. Many futurists still use the term "Moore's law" in this broader sense to describe ideas like those put forth by Kurzweil.

Not all aspects of computing technology develop in capacities and speed according to Moore's law. Random Access Memory (RAM) speeds and hard drive seek times improve at best a few percentage points each year. Since the capacity of RAM and hard drives is increasing much faster than is their access speed, intelligent use of their capacity becomes more and more important. It now makes sense in many cases to trade space for time, such as by precomputing indexes and storing them in ways that facilitate rapid access, at the cost of using more disk and memory space: space is getting cheaper relative to time.

Moreover, there is a popular misconception that the clock speed of a processor determines its speed,[citation needed] also known as the Megahertz Myth. This actually also depends on the number of instructions per tick which can be executed (as well as the complexity of each instruction, see MIPS, RISC and CISC), and so the clock speed can only be used for comparison between two identical circuits. Of course, other factors must be taken into consideration such as the bus width and speed of the peripherals. Therefore, most popular evaluations of "computer speed" are inherently biased, without an understanding of the underlying technology. This was especially true during the Pentium era when Intel, AMD, and other popular manufacturers played with public perceptions of speed, focusing on advertising the clock rate of new products.[44]

Another popular misconception circulating Moore's law is the incorrect assumption that exponential processor transistor growth, as predicted by Moore, translates directly into proportional exponential increase processing power or processing speed.[citation needed] While the increase of transistors in processors usually have an increased effect on processing power or speed, the relationship between the two factors is not proportional. There are cases where a ~45% increase in processor transistors have translated to roughly 10-20% increase in processing power or speed.[45] Different processor families have different performance increases when transistor count is increased. More precisely, processor performance or power is more related to other factors such as microarchitecture, and clock speed within the same processor family. That is to say, processor performance can increase without increasing the number of transistors in a processor. (AMD64 processors had better overall performance compared to the late Pentium 4 series, which had more transistors).[46]